First Data 2009 Annual Report Download - page 217

(6) Includes Ms. Trent’s husband’s holdings of 80,000 shares and 44,000 additional shares covered by options
that are exercisable within 60 days.
(7) Each of Messrs. Kravis, Nuttall and Olson is a member of the Company’s board of directors and serves as
an executive of Kohlberg Kravis Roberts & Co. L.P. and/or one or more of its affiliates. Each of Messrs.
Kravis, Nuttall and Olson disclaim beneficial ownership of the shares held by New Omaha Holdings L.P.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
Policies Regarding the Approval of Transactions with Related Parties
Under the Company’s Director Code of Conduct, each director must report to the Company’s General
Counsel upon learning of any prospective transaction or relationship in which the director will have a financial or
personal interest (direct or indirect) that is with the Company, involves the use of Company assets, or involves
competition against the Company (consistent with any confidentiality obligation the director may have). The
General Counsel must then advise the Board of any such transaction or relationship and the Board must
pre-approve any material transaction or relationship.
Under the Company’s Code of Conduct, executive officers may not use their personal influence to get the
Company to do business with a company in which they, their family members or their friends have an interest. In
situations where an executive officer is in a position of influence or where a conflict of interest would arise, the
prior approval of the General Counsel is required.
Certain Relationships and Related Transactions
On September 24, 2007 and in connection with the merger, First Data entered into a management agreement
with affiliates of KKR (the “Management Agreement”) pursuant to which KKR will provide management,
consulting, financial and other advisory services to the Company. Pursuant to the Management Agreement, KKR
receives an aggregate annual management fee of $20 million, which amount increases 5% annually, and
reimbursement of out-of-pocket expenses incurred in connection with the provision of services. The Management
Agreement has an initial term expiring on December 31, 2019, provided that the term will be extended annually
thereafter unless the Company provides prior written notice of its desire not to automatically extend the term.
The Management Agreement provides that KKR also is entitled to receive a fee equal to a percentage of the gross
transaction value in connection with certain subsequent financing, acquisition, disposition, merger combination
and change of control transactions, as well as a termination fee based on the net present value of future payment
obligations under the Management Agreement in the event of an initial public offering or under certain other
circumstances. The Management Agreement terminates automatically upon the consummation of an initial public
offering and may be terminated at any time by mutual consent of the Company and KKR. The Management
Agreement also contains customary exculpation and indemnification provisions in favor of KKR and its
affiliates. During 2009, the Company incurred $21.3 million of management fees.
Independence of Directors
The Company is privately held and none of the members of the Board of Directors are independent under
the standards of the New York Stock Exchange. Mr. Capellas is not independent as he is employed by the
Company and Messrs. Fisher, Forehand, Kravis, Nuttall, and Olson are not independent due to their affiliation
with KKR.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The Company retained Ernst & Young LLP to audit the accounts of the Company and its subsidiaries for
2009 and 2008. Ernst & Young LLP has served as the independent registered public accounting firm for the
Company or its predecessor entities since 1980.
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